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Monday, January 5, 2015

Andhra Bank to get capital from govt; no merger threat for now

Andhra Bank has almost got a new lease of life and there is no merger threat for the bank for now. The Government is set to grant a capital of about Rs. 200- 300 crore.

The issue of mergers came up for discussion in the two-day bankers meet held in Pune last week and the view is that no bank is in a position to support another bank in view of the prevailing economic conditions, CVR Rajendran, Chairman and Managing Director of Andhra Bank, told BusinessLine here on Monday.

This, in effect, gives a new lease of life for Andhra Bank, the only public sector bank from Andhra Pradesh.

Last week, BusinessLine reported that the bank was facing threat of merger in view of high non-performing assets from big corporate clients, especially from the infrastructure sector.

It has also been decided that the issue of merger/amalgamation will be board-driven and not be pushed by the Government, said Rajendran, adding that: "In addition to capital from the Govt, we will be raising another Rs. 500 crore next month which should give us about Rs. 800 crore. With the previously-raised Rs. 500 crore tier – I capital, we will be comfortable.’’


The bank with a 5.99 per cent non-performing assets in September 2014, will continue to focus on retail and small and medium enterprises. Once the loan-waiver completes in Andhra Pradesh, it hopes to have agriculture portfolio back in the prime.

"The recovery efforts are also on track and by March, we hope to bring down NPAs drastically,’’ he said. It had set a target earlier to bring NPAs down to 4 per cent by the end of current financial year. In the first two quarters, it had recovered over Rs. 2,200 crore NPAs.

Andhra Bank Officers Union had also expressed its complete cooperation in any recovery efforts being planned by the management.

Source : Thehindubusinessline
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Bank Officers union plans strike on Jan 7

The National Organisation of Bank Officers (NOBO) today called a nationwide strike on January 7 demanding pay parity and revision for bank employees, a senior official said.

National General Secretary of NOBO, S U Deshpandey today said that employees affiliated to NOBO were getting very low pay and emoluments as compared to the Central Government employees’ pay as per the sixth pay commission.

Besides existing poor pay range, the benefits of pension to dependents after death of employees and other pension matters are still unresolved and disparity continues as compared to the central government pay structures, he said.

Hence NOBO would go on one day strike this Wednesday and if demands were not met, the bankers would again go on strike from January 21—24, and then on March 16, he added.

Source : Thehindubusinessline
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Central Bank to raise Rs. 660 cr

State-run Central Bank of India is in the process of raising Rs. 660 crore through conversion of perpetual non-cumulative preference shares held by the government into equity shares.

“We are converting our PNCPS into equity which will help us raise around Rs. 660 crore,” the bank’s Executive Director R K Goyal told PTI.

He said the bank is waiting for some of the approvals and may raise it within a week’s time.

PNCPS are non-equity instruments which do not qualify to be counted for Tier-l capital of the banks.

The government has, in the past, infused capital by way of these instruments in public sector banks.

In the current fiscal, the bank has raised Rs. 1,208 crore in two tranches from Life Insurance Corporation of India by allotting shares on a preferential basis.

In August, the lender had sold 7.10 crore shares to LIC and raised Rs. 581.61 crore.

Earlier this month, it had raised Rs. 626 crore by allotting over 8.28 crore shares to the life insurer on a preferential basis.

LIC now holds around 15 per cent stake in the bank.

The government’s holding as of September 30, 2014 stands at 84.20 per cent in the city-based bank.

In order to raise funds, the bank has initiated the process to divest its stake in non-crore assets.

The lender is selling stake in its housing finance subsidiary Cent Bank Home Finance and Infrastructure Leasing and Financial Services (IL&FS), where it is one of the promoters.

In Cent Bank Home Finance, the bank holds over 60 per cent and in IL&FS it is having 8.34 per cent stake.

The bank has appointed ICICI Securities to find a potential buyer for its stake in housing finance business and SBI Capital for IL&FS stake.

The bank’s Chairman and Managing Director Rajeev Rishi had earlier said that the bank needs Rs. 2,000 crore capital in the current fiscal.

The city-based bank reported a net profit of Rs. 103 crore in the July—September quarter as against a loss of Rs. 1,509 crore in the year—ago quarter.

Source : Thehindubusinessline
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